Designer Brands Q2 sales dip 4.2%

Designer Brands Inc., the Columbus, Ohio-based owner of the DSW Designer Shoe Warehouse, The Shoe Company and Shoe Warehouse retail chains, announced on Tuesday that net sales decreased 4.2% in the second quarter ended August 2. 

The company achieved net sales of $739.8 million. Comparable sales fell 5%, with the U.S. retail segment down 4.9%, Canada retail down 0.6%, and the Brand Portfolio segment’s direct-to-consumer channel plunging 29.2%.

Designer Brands posted a net income of $10.8 million, or $0.22 per diluted share. On an adjusted basis, the company reported net income of $16.7 million, or $0.34 per diluted share.

Gross profit dropped to $322.9 million versus $339.5 million last year, with gross margin slipping to 43.7% compared to 44% last year.

“Our second quarter results were highlighted by a 280-basis point sequential improvement in comparable sales from the first quarter, underscoring the impact of our targeted operational initiatives,” said Doug Howe, chief executive officer. 

“These initiatives supported a strong start to the back-to-school season within the U.S. Retail segment as well as gradual improvements in traffic and a notable uptick in conversion. We anticipate our ongoing efforts to strengthen our brand, drive awareness through investments in marketing, and optimize our omni-channel model will continue to support our transformation.”

Looking ahead, the company did not provide a full year outlook.

“While consumer sentiment has ticked up slightly, given the ongoing macroeconomic volatility with recent extended tariff increases and caution in discretionary spending, there is still a notable amount of uncertainty. That said, we remain committed to disciplined execution in those areas within our control as we navigate the near-term environment while continuing to build a stronger, more sustainable business for the future,” Howe added.